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Choosing a Good Book
With 100s and thousands of books available on business topic, how do you choose a good book that you want to purchase or read? If you narrow down your choice to a particular book you will still need to decide if it is worth, - spending the money to...
How to save money by spending wisely
Why is it that the older and richer people become, the more conservative they are with their money? Have you ever done or know someone who has made an investment that promised a 10% interest or profit per month? Everyone wants to make above average...
New car financing
Most people go shopping for a new car and then consider their financing options. While this is the standard method it may not be your best option. Just like shopping for your new car, you need to carefully research your financing options and be...
Understanding Niche Publicity
Everyone keeps their radio tuned to station WIIFM - What's In It For Me. This fact and its implications hold a valuable secret for multiplying publicity opportunities. Let's put ourselves first in the position of the editor of a magazine for...
"Using Images in Your Salesletter: Three Tips Guaranteed
Placing just one or two carefully selected images within your salesletter can be worth thousands of dollars in sales. In fact, just one image that brings your eBook, software, audio product, or free bonus items to life can have a real impact on...
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Optimizing your cash flow with proper accounts receivable management
Businesses miss on growth opportunities and even close their doors every day, not because they aren’t profitable enough, but because they are strangled by poor cash flow. The problem is that while their profit and loss statement shows success, their bank account cries poor. Excessive money tied up in delinquent receivables, bad checks, and bad debt write-offs, rob businesses of valuable cash flow, handcuffing their ability to grow or even stay in business at all.
It doesn’t take long for a business to get caught up in a spiraling trend of increasingly late receivables, only needing a few additional delinquent accounts to start the process. Most companies lack the expertise and manpower needed to handle a spike in delinquent accounts. Soon, their staff is doing more work chasing late receivables, and they end up neglecting the easier to collect, more current accounts. Eventually, a higher and higher percentage of accounts become delinquent and more and more accounts become uncollectible, forcing companies to employ expensive collection agencies to recover at least some of their money at a big loss or they write off the debt completely. The end result is a loss in profitability and a serious strain on cash flow.
There are some more obvious, common sense practices that companies can employee to maintain a healthy accounts receivable portfolio. A few examples include:
1. Perform a credit history check before extending credit. 2. Set and adhere to credit limits. 3. Establish your credit terms in writing on statements and invoices 4.
Require all sales and money management staff to know and follow credit policies.
As for maintaining or restoring a healthy accounts receivable portfolio, companies may need to invest in additional personnel or outside services with expertise in delinquent debt collection. If a company’s receivables are large enough and they have a budget which allows them to add experienced, full-time debt collectors to their staff, they should make the investment in additional personnel. If a company can’t afford it or their delinquent receivables don’t require full-time attention, outsourcing would be a better alternative.
National Revenue Corporation is a collections agency that specializes in “preventative maintenance” collections strategies. They offer variety of low, fixed fee solutions that make it attractive for businesses to employ their services to perform collections on delinquent accounts right as they become delinquent. They provide the necessary expertise to collect on the harder, delinquent accounts, while their client’s staff focuses its efforts on the more current, easier to collect accounts. With this approach, both current and delinquent account collections improve yielding improved cash flow and a well-balanced accounts receivable portfolio.
About the Author
Marc Eskew is widely recognized in the area of accounts receivable management. For more information on preventative maintenance approach to accounts receivable management or to contact Mr. Eskew, please visit www.fmxservices.com/cashflow.
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